The Hindu Business Line : Rural investments in MF funds declining: Assocham

THE Associated Chambers of Commerce and Industry has suggested the creation of value chain services by the State-owned mutual funds industry so that investments by rural and lower middle class investors comes into this industry.

It has also suggested to the Government that the mutual fund industry should be empowered to manage and regulate retirement funds of both government and private employees since this would lead to increased fund flow.

According to an analysis by Assocham, investment from the rural sector in mutual funds has declined by 1.8 percentage points since January this year. The rural investment in mutual funds was 3.8 per cent of the total mutual funds investment early this year but this has come down to 2 per cent in August.

The Assocham President, Mr Mahendra K. Sanghi, said in a statement that the rural exposure to mutual fund industry has declined mainly because the industry was unable to provide access to rural investors and neither did it create adequate awareness to lure such investments.

In urban areas, however, about 14 per cent of the 200 million households had mutual fund exposure by January 2004 and their number shot up to 16 per cent by August, taking up the urban mutual funds exposure to over 228 million, he said.

The chamber said that while the mutual fund industry in India has seen dramatic improvements in quantity as well as quality of product and service offerings over the past decade, industry experts concede that the growth witnessed in the last decade was much below potential. The assets under management (AUM) in mutual funds have grown from about Rs 47,000 crore in March 1993 to Rs 1,54,000 crore in April 2004 and could increase substantially in the next few years provided the industry takes steps to attract investors.

More Stories on : Mutual Funds | Industry Associations

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Equity-linked annuities for pension investors

Rural investments in MF funds declining: Assocham

Equity fund investors seem to have bright future

Oil prices may set direction

Don't get nixed that Sensex didn't cross 6000

Satyam falls, its premium crashes

`Sentiment not likely to improve dramatically for debt funds'